XML 59 R44.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Income Taxes (Tables) | 12 Months Ended
--- | ---
Aug. 31, 2022
Income Tax Disclosure [Abstract] |
Income (Loss) Before Income Tax Expense | Income (loss) before income tax expense is summarized below (in millions):
| Fiscal Year Ended August 31,
| 2022 |  | 2021 |  | 2020
Domestic(1) | $ | (116) |  |  | $ | (271) |  |  | $ | (452) |
Foreign(1) | 1,347 |  |  | 1,215 |  |  | 713 |
Total | $ | 1,231 |  |  | $ | 944 |  |  | $ | 261 |
(1)Includes the elimination of intercompany foreign dividends paid to the U.S.
Income Tax Expense (Benefit) | Income tax expense (benefit) is summarized below (in millions):
| Fiscal Year Ended August 31,
| 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Domestic - federal | $ | 7 |  |  | $ | 7 |  |  | $ | (3) |
Domestic - state | 2 |  |  | 3 |  |  | 1 |
Foreign | 239 |  |  | 252 |  |  | 180 |
Total current | 248 |  |  | 262 |  |  | 178 |
Deferred: |  |  |  |  |
Domestic - federal | (25) |  |  | 2 |  |  | (10) |
Foreign | 12 |  |  | (18) |  |  | 36 |
Total deferred | (13) |  |  | (16) |  |  | 26 |
Total income tax expense | $ | 235 |  |  | $ | 246 |  |  | $ | 204 |
Reconciliations of Income Tax Expense at U.S. Federal Statutory Income Tax Rate Compared to Actual Income Tax Expense | Reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is summarized below:
| Fiscal Year Ended August 31,
| 2022 |  | 2021 |  | 2020
U.S. federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal tax benefit | 0.7 |  |  | 0.2 |  |  | (2.6) |
Impact of foreign tax rates(1)(2) | (4.0) |  |  | (4.6) |  |  | (0.9) |
Permanent differences | 1.2 |  |  | (0.4) |  |  | 3.2 |
Income tax credits(1) | (0.5) |  |  | (0.4) |  |  | (2.5) |
Changes in tax rates on deferred tax assets and liabilities(3) | — |  |  | — |  |  | 10.3 |
Valuation allowance(4) | (3.3) |  |  | 1.3 |  |  | 16.8 |
Equity compensation | (0.5) |  |  | 0.6 |  |  | 2.2 |
Impact of intercompany charges and dividends | 3.6 |  |  | 4.4 |  |  | 15.0 |
Global Intangible Low-Taxed Income | 1.1 |  |  | 3.0 |  |  | 13.7 |
Other, net | (0.2) |  |  | 0.9 |  |  | 2.0 |
Effective income tax rate | 19.1 | % |  | 26.0 | % |  | 78.2 | %
(1)The Company has been granted tax incentives for various subsidiaries in China, Malaysia, Singapore and Vietnam, which primarily expire at various dates through fiscal year 2031 and are subject to certain conditions with which the Company expects to comply. These tax incentives resulted in a tax benefit of approximately $80 million ($0.57 per basic weighted average shares outstanding), $51 million ($0.34 per basic weighted average shares outstanding) and $43 million ($0.28 per basic weighted average shares outstanding) during the fiscal years ended August 31, 2022, 2021 and 2020, respectively. (2)For the fiscal years ended August 31, 2022 and August 31, 2021, the impact of foreign tax rates was primarily related to increased income in low tax rate jurisdictions. (3)For the fiscal year ended August 31, 2020, the changes in tax rates on deferred tax assets and liabilities was primarily due to the re-measurement of deferred tax assets related to an extension of a non-U.S. tax incentive of $21 million. (4)For the fiscal year ended August 31, 2022, the valuation allowance change was primarily due to an income tax benefit of $26 million for the reversal of a portion of the U.S. valuation allowance and decreased deferred tax assets with corresponding valuation allowances due to the liquidation of certain non-U.S. subsidiaries. The valuation allowance change for the fiscal years ended August 31, 2021 and 2020 was primarily due to the change in deferred tax assets for sites with existing valuation allowances.
Deferred Tax Assets and Liabilities | Significant components of the deferred tax assets and liabilities are summarized below (in millions):
| August 31, 2022 |  | August 31, 2021
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 176 |  |  | $ | 200 |
Receivables | 4 |  |  | 8 |
Inventories | 16 |  |  | 14 |
Compensated absences | 13 |  |  | 13 |
Accrued expenses | 106 |  |  | 115 |
Property, plant and equipment | 66 |  |  | 71 |
Domestic tax credits | 11 |  |  | 11 |
Foreign jurisdiction tax credits | 4 |  |  | 10 |
Equity compensation | 10 |  |  | 10 |
Domestic interest carryforwards | 4 |  |  | 4 |
Cash flow hedges | — |  |  | 10 |
Capital loss carryforwards | 20 |  |  | 20 |
Revenue recognition | 32 |  |  | 36 |
Operating and finance lease liabilities | 72 |  |  | 60 |
Other | 27 |  |  | 19 |
Total deferred tax assets before valuation allowances | 561 |  |  | 601 |
Less valuation allowances | (281) |  |  | (353) |
Net deferred tax assets | $ | 280 |  |  | $ | 248 |
Deferred tax liabilities: |  |  |
Unremitted earnings of foreign subsidiaries | $ | 57 |  |  | $ | 60 |
Intangible assets | 25 |  |  | 27 |
Operating lease assets | 111 |  |  | 92 |
Other | 10 |  |  | 4 |
Total deferred tax liabilities | $ | 203 |  |  | $ | 183 |
Net deferred tax assets | $ | 77 |  |  | $ | 65 |
Summary of Tax Credit Carryforwards | The amount and expiration dates of income tax net operating loss carryforwards, tax credit carryforwards, and tax capital loss carryforwards, which are available to reduce future taxes, if any, as of August 31, 2022 are as follows (in millions):
| Last Fiscal Year of Expiration |  | Amount
Income tax net operating loss carryforwards:(1) |  |  |
Domestic - federal | 2038 or indefinite |  | $ | 13 |
Domestic - state | 2042 or indefinite |  | $ | 54 |
Foreign | 2037 or indefinite |  | $ | 567 |
Tax credit carryforwards:(1) |  |  |
Domestic - federal | 2032 |  | $ | 7 |
Domestic - state | 2027 or indefinite |  | $ | 4 |
Foreign(2) | Indefinite |  | $ | 4 |
Tax capital loss carryforwards:(3) |  |  |
Domestic - federal | 2026 |  | $ | 76 |
(1)Net of unrecognized tax benefits. (2)Calculated based on the deferral method and includes foreign investment tax credits. (3)The tax capital loss carryforwards were primarily from an impairment of an investment that was deemed worthless for tax purposes.
Summary of Operating Loss Carryforwards | The amount and expiration dates of income tax net operating loss carryforwards, tax credit carryforwards, and tax capital loss carryforwards, which are available to reduce future taxes, if any, as of August 31, 2022 are as follows (in millions):
| Last Fiscal Year of Expiration |  | Amount
Income tax net operating loss carryforwards:(1) |  |  |
Domestic - federal | 2038 or indefinite |  | $ | 13 |
Domestic - state | 2042 or indefinite |  | $ | 54 |
Foreign | 2037 or indefinite |  | $ | 567 |
Tax credit carryforwards:(1) |  |  |
Domestic - federal | 2032 |  | $ | 7 |
Domestic - state | 2027 or indefinite |  | $ | 4 |
Foreign(2) | Indefinite |  | $ | 4 |
Tax capital loss carryforwards:(3) |  |  |
Domestic - federal | 2026 |  | $ | 76 |
(1)Net of unrecognized tax benefits. (2)Calculated based on the deferral method and includes foreign investment tax credits. (3)The tax capital loss carryforwards were primarily from an impairment of an investment that was deemed worthless for tax purposes.
Reconciliations of Unrecognized Tax Benefits | Reconciliation of the unrecognized tax benefits is summarized below (in millions):
| Fiscal Year Ended August 31,
| 2022 |  | 2021 |  | 2020
Beginning balance | $ | 241 |  |  | $ | 190 |  |  | $ | 164 |
Additions for tax positions of prior years | 22 |  |  | 15 |  |  | 10 |
Reductions for tax positions of prior years | (21) |  |  | (3) |  |  | (9) |
Additions for tax positions related to current year(1) | 36 |  |  | 36 |  |  | 27 |
Cash settlements | (3) |  |  | — |  |  | (1) |
Reductions from lapses in statutes of limitations | (3) |  |  | (2) |  |  | (1) |
Reductions from non-cash settlements with taxing authorities | (9) |  |  | — |  |  | (2) |
Foreign exchange rate adjustment | (10) |  |  | 5 |  |  | 2 |
Ending balance | $ | 253 |  |  | $ | 241 |  |  | $ | 190 |
Unrecognized tax benefits that would affect the effective tax rate (if recognized) | $ | 150 |  |  | $ | 139 |  |  | $ | 109 |
(1)The additions for the fiscal years ended August 31, 2022, 2021 and 2020 are primarily related to taxation of certain intercompany transactions.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32537-109319 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income before income tax between domestic and foreign jurisdictions. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(1)(Note 1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the change in unrecognized tax benefits. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI https://asc.fasb.org/extlink&oid=126976462&loc=d3e36027-109320 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI https://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 + Details
Name: | us-gaap_ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of pertinent information, such as tax authority, amounts, and expiration dates, of net operating loss carryforwards, including an assessment of the likelihood of utilization. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32559-109319 + Details
Name: | us-gaap_SummaryOfOperatingLossCarryforwardsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of tax credit carryforwards available to reduce future taxable income, including amounts, expiration dates, limitations on use and the related deferred tax assets and valuation allowances. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32559-109319 + Details
Name: | us-gaap_SummaryOfTaxCreditCarryforwardsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration